What will the Autumn statement mean for the property market?

Next week on the 23rd November, Philip Hammond, Chancellor of the Exchequer, will deliver his first Autumn Statement. Portico London estate agents look at what to expect from the Autumn Statement 2016 in terms of housing, tax and infrastructure…

Tackling the housing shortagePhilip Hammond has decided to take a different fiscal stance to George Osborne, abandoning his pledge to balance the books by the end of this parliament. This will enable him to borrow more money – and potentially boost the building of new homes, ensuring that over time, property becomes more affordable.

What do the experts think?Alanzo Seville, Mortgage & Insurance Adviser at Capricorn Financial, believes that “If the Chancellor focuses on the supply of new build houses (based on average affordability calculations for example), in conjunction with empowering Local Authorities, Housing Associations and developers, he could provide first-time buyers with the kind of help that is actually needed.”

Robert Nichols, Managing Director of Portico says “The problem in London is not simply the lack of supply but the chronic lack of affordable housing. It’s vital that we start investing heavily in the capital’s infrastructure and new high-speed communication links, which could allow London workers to live in more affordable areas.”

Will Stamp Duty Land Tax be cut?There have been recent rumours that either the additional property stamp duty could be abolished, or that the liability for stamp duty will switch from the purchaser to the seller.

The instances when the additional stamp duty should be applied is still open to interpretation depending on the complexity of the transactions, so some clearer guidelines in the upcoming Autumn Statement would be much appreciated.

What do the experts think?Robert Nichols, Managing Director of Portico, believes that “It’s time the new government reviews the additional stamp duty taxes aimed at buy-to-let investors and the most expensive properties. Actions need to be taken in order to create some movement in the market, and currently stamp duty land tax is slowing transactions down.”

Alanzo Seville, Mortgage & Insurance Adviser at Capricorn Financial agrees with Robert that stamp duty is a burden to landlords, but doubts “that the tax will be removed altogether, especially in light of the recently announced stamp duty receipts attributed to the new regulations. Some have argued that switching the liability for stamp duty will aid first-time buyers and provide the residential market with a kick-start in 2017. However the chances are that such a step change will cause asking prices to increase, which will in turn exacerbate the affordability crisis rather than solve it.”

Infrastructure – Crossrail 3?Infrastructure spending is almost certain to feature in the upcoming Autumn Statement. Speaking in Washington, Hammond stated that “Now is a good time to invest in genuinely productivity-enhancing infrastructure, and to take advantage of low borrowing costs and our ability to borrow.”

But while the Chancellor is expected to deliver a boost to spending on roads and railways (as well as housing), he has made it clear it will not be a “fiscal splurge.”

What do the experts think?Robert Nichols, Managing Director of Portico, thinks “To counter Brexit uncertainties, it’s vital we make sure our infrastructure and communication links across London and the rest of the UK are 21st century.”

Though no new major projects or commitments are likely to be announced, Hammond may fast-track already scheduled projects – like Crossrail 2 – which could in turn put momentum back into the London property market.

Robert Nichols goes on to explain, “Areas experiencing infrastructure investment typically benefit from a boost in both rental yield and capital growth – even in an unstable or weak market. As we’ve seen first-hand in the last couple of years and more recently with the Night Tube, big infrastructure projects have a very positive impact on property prices.”

If you would like to buy, sell or let your property, or if you’d like any more information on the market, give Portico estate agents a ring today on 0207 099 4000.